THE TREATMENT OF MONEY IN REGIONAL ECONOMICS

ABSTRACT. A survey of regional monetary theory suggests a regional segmentation of financial markets on the basis of differences in portfolio preference, or market imperfections. These possibilities are explored here using post-Keynesian monetary theory. It is concluded that the availability of credit to a region depends more on the (potentially volatile) degree of confidence in the regional economy. The amount of liquidity thus generated depends on the propensity for capital flight due to liquidity preference. The resulting tendency for regions attracting low degrees of confidence to experience liquidity shortage will be greater the more integrated the national banking system.     

The Euro: Faith Hope and Parity

The inauguration of the euro as the currency of the European Union is the most far‐reaching step so far taken in the long‐term movement for regional political and economic integration. The new money demonstrates that the initial customs union established by the Treaty of Rome has grown to such an extent that member states are willing to surrender control over their national central banks and currencies. Only three members of the EU have refused to join—Britain, Denmark and Sweden. Despite widespread scepticism, the euro so far has been a success. The new currency, while a dramatic innovation, is also congruent with financial dimensions that can be traced through the history of the European Community. The experience of inflation in the 1960s and 1970s was a powerful incentive to establish strong European central banking institutions. The euro is both derivative from and competitor with the US dollar, and American historical experience over the long term as well as foreign policies since the Second World War are germane to analysis. For Britain, remaining outside the euro zone so far has not brought negative consequences and may have been beneficial to the economy. For most member governments of the EU, the opportunity to pool resources through a regional currency understandably has been a persuasive incentive, especially given the enormous growth of private capital markets. The creation of the euro has been facilitated by the shifting nature of money. Currencies have changed from distinctive national components of the highly structured Bretton Woods system to relatively freely traded commodities, and the traditional distinctive characteristics of money have been blurred with the evolution of credit markets, financial instruments and technology. The fundamental test of the euro will occur when member states face differentiated political pressures to inflate economies in order to combat unemployment. To date, the European currency has been the latest confirmation of the insight of Jean Monnet and others to employ economic integration to reduce the likelihood of a resurgence of militarism and war.     

The US Debtfare State and the Credit Card Industry: Forging Spaces of Dispossession

Abstract: Credit card debt is a ubiquitous feature of neoliberal capitalism. To explain the notable growth of credit card usage in the US, I adopt a historical materialist approach that employs two key analytical concepts—cannibalistic capitalism and the debtfare state—to capture the material, institutional and ideological dimensions of this process. Viewed within the bounds of cannibalistic capitalism, a mode of accumulation primarily based on the expansion of fictitious capital and secondary forms of exploitation, the debtfare state enhances the social power of money by allowing major credit card issuers (banks) to generate high levels of income from uncapped interest rates and policies that ensure the extension of plastic money to those who fall within Marx's category of the surplus population. While the expansion of debt subjects surplus workers to the disciplinary requirements of the market, it is unable to suspend the main tensions of cannibalistic capitalism, prompting ongoing reconstructions of the debtfare state.     

Bank Liquidity Creation in Russia

Two EU-based senior economists analyze the contribution of bank liquidity creation to the Russian economy, as well as changes in creation of liquidity occurring during the global financial crisis. Applying the methodology of Berger and Bouwman's (2009) study of U.S. banking to a rich panel dataset for Russian banks for the period 1999-2009, the authors compute three alternative measures of bank liquidity creation. They find evidence of increased creation of liquidity in real terms over the period and also determine that state-controlled (versus private) banks and Russia's largest banks (versus intermediate-size and small banks) contributed most to liquidity creation (lower in Russia than in the U.S.). Their findings suggest that consolidation of the Russian banking sector may prove more instrumental in increasing liquidity creation than privatization per se.     

Money and prices in thirteenth-century Venice

Prices and salaries rose in Venice between 1173 and 1282. The supply of money also probably increased. Wine, grain, and commodity prices, as well as magistrates' salaries, are here collected from documentary sources to illustrate this rise in prices. Evidence from silver mining, foreign trade, banking, and diplomacy seems to demonstrate an increase in the supply of money, but price inflation (the Fisher equation, MV = PT) cannot be definitely illustrated because velocity and transaction costs cannot yet be established for medieval Venice. To clarify these prices, this study also briefly describes the coins and moneys of account used in Venice in this century.     

The money tree: Exploring central bank digital currency blockchain imaginaries

Central banks worldwide are developing, piloting and launching new central bank digital currencies (CBDCs). As the hub for the central banking community, the Bank for International Settlements (BIS) promotes a curiously botanical CBDC imaginary. From ‘money flowers’ to ‘tree trunks’ and a ‘strong canopy’, This helps to naturalize CBDC without clarifying its sociopolitical implications or envisioned monetary future, such as geopolitical tensions and financial fragmentation, new modes of financial interaction or the strengthened role of central banks. While omitting the paradoxes and ambivalences of CBDC, the imaginary of the BIS structures the enfolding discourses and allows the bank to function as a think tank for financial policy-making.     

Tailored for Panama: Offshore Banking at the Crossroads of the Americas

With the steady integration of a deregulated world of hypermobile capital, offshore banking has become an increasingly significant part of the geography of international finance. Many interpretations tend to treat offshore banking centres as identical sites of investment that can be easily substituted for one another by completely mobile, fungible capital. This paper explores the nature of offshore banking in one largely overlooked centre, Panama. It charts the historic context that led to the creation of Latin America's most important centre of international banking, emphasizing the unique qualities that stand in contrast to hyperglobalist interpretations, including the Canal and the role of the US dollar. Second, it summarizes the regulatory changes initiated in the face of global neoliberalism, including the absence of a central bank and recent reforms designed to attract foreign capital. Using primary and secondary data, the paper maps Panama's growing role as a net capital exporter, charting domestic and foreign loan markets. Finally, it also addresses the trade–offs between confidentiality, and transparency in the context of illicit activities frequently alleged to occur in offshore banking centres, which in Panama revolve around drug trafficking and money laundering. It concludes by noting that even in an ostensibly seamless world, offshore banking exhibits the place–based embeddedness of financial capital within local institutional relations.     

Development of Local Financial Systems in Mainland China

Two Beijing-based economic geographers present a comprehensive study of local financial systems in China. The paper analyzes the most recently available (2006) regional data on exogenous (state-owned, foreign-owned, and joint shareholder-owned) and endogenous (city commercial banks and rural credit cooperatives) banks, highlighting the differences between the country's coastal and the lagging rural provinces located in China's central and western macroregions. A key component of the analysis is the geographic distribution of bank branches and assets. Special attention is devoted to Shanghai, the country's traditional financial center, which has attracted the bulk of foreign-owned banks and financial service providers seeking entry into the vast Chinese market. Journal of Economic Literature, Classification Numbers: G21, G28, O18, P34. 9 figures, 3 tables, 54 references.     

新中国成立初期中南区乡村个体农民融资途径与结构研究

新中国成立之初,随着国家银行业务在农村的延伸及农村信用合作社的建立,在农村形成了私人借贷、国家农贷与农村信用社三者并存的乡村借贷体系。在新的农村金融体系中,国家银行和信用合作社逐渐占据了主导地位。新体系的建立,增加了农村资金的供给,一定程度上满足了农民克服生活困难、发展家庭经济的需要,同时也压缩了高息借贷的活动空间。     

The Macro‐Economic Effects of Directed Credit Policies: A Real‐Financial CGE Evaluation for India

The effectiveness of directed credit programmes as an instrument for economic development is the subject of considerable debate. However, the focus of this debate is almost exclusively on the intra‐sectoral effects of directed credit and its adverse effects on financial sector performance, neglecting possible spillover effects on demand, production and investment in the rest of the economy. This article tries to fill this gap by examining the macro‐economic effects of directed credit in India with the help of a novel real‐financial computable general equilibrium (CGE) model. Focusing on credit rather than money, the model goes beyond earlier modelling approaches by (1) incorporating directed credit policy and credit rationing; (2) recognizing the dual role of credit for working capital and investment; and (3) allowing for switches between credit‐constrained, capacity‐constrained and demand‐constrained regimes. The results from short‐ and medium‐term simulation experiments with the model indicate that, when credit market failures result in rationing as in India’s agricultural and small‐scale industrial sectors, the macro‐economic effects of directed credit are likely to be significant and positive.     

Change without Transformation: Social Policy Reforms in the Philippines under Duterte

This article explores social policy reforms championed by the Philippines’ strongman president Rodrigo Duterte during his first three years in office (2016–19), as a case for examining the transformative potential of social policy expansion under rising new right-wing and authoritarian leaders. By showing how political economy and historico-institutional conditions foreclose the transformative possibilities of the social policy changes effected by Duterte, the author offers a critique of current tendencies in global development discourses to treat all forms of social policy expansion as progressive. In the Philippines case, there is no progressive ideology guiding the reforms, nor are there political movements overseeing the expansion of social rights now inscribed in law. Rather, the reforms institutionally entrench a minimalist approach to universalism and strengthen the foothold of poverty targeting as an organizing principle of social provisioning. Social policy expansion under Duterte manifests aspects of the ‘dark side’ of social policy reforms during the current global political moment, including the use of such policy reforms to legitimize a conservative and authoritarian political order, and the functionality, across the political spectrum, of ‘narrow universalism’ — the type championed by international development agencies — which serves to deepen segmentation in social provisioning.     

Russia's Market-Distorting Federalism

An American specialist in Russian regional affairs focuses on distinctions between Russian and Chinese federal relationships in order to examine the relationship between the types of political-economic decentralization and the success or failure of market reforms. The analysis includes an overview of regional differences in Russia in the implementation of key structural and policy changes that are components of the reform program, including but not limited to privatization, price and budget policy, the creation of small private enterprises, and government regulation of local economic activity. Supporting evidence and local press reports extend through October 1997. Journal of Economic Literature, Classification Numbers: 052, 053, P51, R59. 1 table, 21 references.     

The Impact of State-Controlled Banks on the Russian Banking Sector

A senior Russian economist examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2011. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.     

清代前期账局、放账铺研究--以五种账局、放账铺清单的解读为中心

清代前期不但有资本规模较大,主要针对商号及官员放贷的大账局,也有资本规模较小,可能针对小商人、小手工业者甚至地主农民放贷的放账铺。至少从乾隆年间开始,账局、放账铺已经比较普遍地运用合伙制的方式筹措资本。账局的重要业务之一就是对官员放京债,这种放贷利率高、数额大,但风险也甚高。与此同时,账局也开始大规模地对商号商人放贷,每家较大型的账局至少可能对三十至五十家以上的商号放贷,放贷数额常到一千两以上,最少也有一百两。这种放贷,直至道光年间还很兴盛。账局、放账铺已经具有了商业银行的功能,但是否够得上商业银行,还须进一步探讨。     

Expanding Women's Co-operatives in China through Institutional Linkages

This article examines the institutional linkages between three women workers' co-operatives, the first women's credit co-operative in China, and the co-operative support organization, the International Committee for the Promotion of Chinese Industrial Co-operatives (ICCIC). The study shows that Chinese women in rural areas have increasingly adopted co-operatives as a form of organization in their efforts to address the problem of their lack of access to resources, including land, credit, jobs, training and information, and to participate in the mainstream economy as an organized force. This article demonstrates that stronger institutional linkages between local offices of the All-China Women's Federation and the ICCIC encourage the growth of women's co-operative activities. It raises two sets of policy issues that are central to the development of co-operatives and women's banking: the continued growth of these activities will depend upon the government adopting legislation to define the legal framework governing co-operative relations and management systems, and establishing gender-inclusive policies to increase credit to women's income-generating activities.     

上海金融业与金圆券政策的推行

1948年的金圆券政策及其推行有着多方面的内容,包含着复杂的关系,其掠夺性、不合理性的显现有一个过程,上海金融业对金圆券政策态度从遵行、异议、批评到反对也有转变的过程。以往对金圆券政策问题的研究,主要以国民党政权及其国家行局为主体,以其相关决策及实施为主线,其研究比较简略和狭窄;其实,选择上海私营金融业为考察主体,以当时私营行庄公司如何应对实施金圆券政策的各主要方面为研究主线,着重从私营金融业的基本态度、金银与外汇资产、利率、资本升值和现金增资等方面进行探讨,可以进一步深化对金圆券问题本身以及对20世纪40年代末上海金融业与国民党政权关系的研究。     

Access to capital markets and the geography of productivity leaders and laggards

This paper examines whether access to the capital market of convertible and nonconvertible bonds affects total factor productivity (TFP) for the population of Italian joint stock manufacturing companies, based in highly segmented local financial markets, between 2007 and 2017. The hypothesis, well grounded in the literature, is that long-term capital favors investment in intangibles and other risky assets necessary for productivity growth. To identify this effect, we exploit the exogenous shock of the Italian banking deregulation of the mid-1990s as an instrument for firm-level access to capital, interacted with distance from logistic networks. These reforms changed the distribution of the type of branches at the local level, increasing the share of joint stock banks, which have high connections to international capital markets. This geographical reallocation of banking activities ultimately affected firms' financial structure, favouring their access to capital, even when based in peripheral financial areas. Firms which issued instruments of market debt achieved higher levels of productivity and a higher probability to reach top percentiles of productivity distribution.     

The economic impact of national competition policy on Australian regions

Over the past 7 years Australia has been undergoing substantial economic reform under a collaborative Federal and State government programme known as national competition policy. These reforms have increased the nation's productivity and international competitiveness, and are generally held responsible for Australia's increased growth rate in gross domestic product (GDP) per capita over the past decade. However, the reforms have been carried out against a background of increased interregional disparities, to which the reform programme may have partly contributed. In this study we examine a number of Australian studies that have used computable general equilibrium modelling to uncover the regional economic consequences of national competition policy.     

Foreign Banking in China: A Study of 279 Branch Units in 32 Cities

Two China-based geographers examine the gradual relaxation of restrictions on the activity of foreign banks in China as a prelude to a more focused investigation of the concentrated locational pattern of foreign banking in that country. The study, which embraces 32 Chinese cities, emphasizes the factors that have attracted foreign banks to particular cities and regions of China, including the existence of special banking opportunities, the so-called "follow-the customer" strategy, externalities associated with major financial centers such as Beijing and Shanghai, relaxed banking regimes in particular urban centers and special economic zones, and exposure to international trade and to a variety of foreign business enterprises. The locational preferences of foreign banks in relation to their countries of origin are addressed in some detail.     

The Local Implications of Major Job Transformations in the City: A Spatial Microsimulation Approach

The changing dynamics of regional and local labor markets during the last decades have led to an increasing labor market segmentation and socioeconomic polarization and to a rise of income inequalities at the regional, urban, and intraurban level. These problems call for effective social and local labor market policies. However, there is also a growing need for methods and techniques capable of efficiently estimating the likely impact of social and economic change at the local level. For example, the common methodologies for estimating the impacts of large firm openings or closures operate at the regional level. The best of these models disaggregate the region to the city (Armstrong 1993; Batey and Madden 1983). This paper demonstrates how spatial microsimulation modeling techniques can be used for local labor market analysis and policy evaluation to assess these impacts (and their multiplier effects) at the local level‐to measure the effects on individuals and their neighborhood services. First, we review these traditional macroscale and mesoscale regional modeling approaches to urban and regional policy analysis and we illustrate their merits and limitations. Then, we examine the potential of spatial microsimulation modeling to create a new framework for the formulation, analysis and evaluation of social and local labor market policies at the individual or household level. Outputs from a local labor market microsimulation model for Leeds are presented. We show how first it is possible to investigate the interdependencies between individual's or households labor market attributes at the microscale and to model their accessibilities to job opportunities in different localities. From this base we show how detailed what‐if microspatial analysis can be performed to estimate the impact of major changes in the local labor market through job losses or gains, including local multiplier effects.